November NewsletterSubmitted by Rademacher Financial Inc. on November 7th, 2018
Market Update for October 2018
October was a challenging month for the markets with major indices down between (5.7%) and (10%.) The last two trading days of the month did provide some minor relief, though it was not enough to offset losses. At this time, it is important to remember that we are investors, and have a much longer outlook on the market than a single month. In addition, September and October have historically been the worst performing months of the year. (Figure 1) November through January have, on average, produced stronger returns as well.
That being said, the road to recovery could still hit a few speedbumps. The trade war with China is far from over. Until there is a meaningful conclusion we may continue to see increased volatility. The Fed has continued to increase interest rates which will weigh on equity markets as bonds start to look more attractive. However, these hikes have been telegraphed well in advance.
Another issue, is the concern over ‘peak profit margins,’ and the idea that companies will not continue to grow profits as quickly. Though some companies are not be growing as fast, they are still experiencing robust earnings growth. Strength in the US economy has also helped spur growth; unemployment is at historical lows, GDP has steadily increased and inflation is near the Fed’s target rate of 2%. Though we may not have seen the end of the current round of volatility, our risk indicators still remain positive and we are optimistic moving forward.
From the Office Front…
November begins the holiday season—well, there were sightings of Halloween candy in the reception area in October—but it is November that really indicates that the holidays will soon be upon us. At Rademacher Financial, we try to use this season especially to “give back” to the community by hosting a Food Drive. This annual event (we hope to make it more frequent as food shortages are not just during the holiday season!) will begin this year on November 12. We will continue to collect food items through December 10. Our recipient again this year will be Just Food, the Food Pantry in Douglas County. Just Food allows persons who qualify (those within 185% of the federal poverty level and who live in Douglas County) to come in to receive perishables daily and non-perishables and meat once each 30 days.
In addition to food distribution, they also run “Just Cook” an education program that teaches families how to cook healthy meals for under $2.00 per serving, “Just Grow” program that connects families with healthy options by teaching them how to grow their own food, and “KitchenWorks” a professional, industry inspired culinary training program designed to give students the essential skills to gain employment in a restaurant or culinary institution.
If you would like to know more about the bountiful opportunities Just Food provides, please visit their website at www.justfoodks.org.
On a Personal note…
It feels like we went from summer to almost winter in about two weeks this month. The leaves are falling fast. October seems to have flown by. The reports from Garrett at college have been positive. His studies seem to be going well. He has continued his bread baking in college this fall. His sourdough not only looked great, it also tasted wonderful.
Katelyn will be home in the next couple weeks after wrapping up her first professional gig as a political campaign hired gun. Otherwise known as a Finance Assistant. Rachel and I are looking forward to having her home in between campaign jobs.
The highlight of the month for me was attending Phil Collins’ Las Vegas Concert with Lisa (Rachel’s best friend from college) and Rachel. Phil was always my favorite musician growing up (and not just because we have the same first name). I have seen him 4 times (including Vegas) and Genesis once. Phil is known as the “drummer” who became the lead singer of Genesis after Peter Gabriel left the band. Phil is now 67 years old and had back surgery a couple of years ago. He now walks with a cane. He was pretty slow walking out on to stage to sit on a stool for the entire concert. However, once he started singing, all of his energy was there, strong voice as well as his “geeky” stage antics. Phil can’t play the drums anymore but his 17-year-old son, Nic, has been the drummer on the tour. That by itself was pretty cool. At one point, it was only Phil singing and Nic playing one of Dad’s songs on the piano. Very cool. Or as everyone who has asked me knows; “How was the concert?” “IT WAS TOTALLY AWESOME!”
Rachel has been busy working in her glass studio. Many of you who attended our Final Friday’s art event in September have asked why her work wasn’t included. She will be participating in the Lawrence Art Guild’s annual Holiday Art Fair this year—it will be held on December 1st at the Lawrence Art’s Center. If you are interested, be sure to check out her glass as well as the work of other great local artists!
I hope everyone has a wonderful Thanksgiving. Spending time with friends and family.
I’ll catch you next month!
Phillip A Rademacher, CFP ®
Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of Rademacher Financial, Inc. and the Research Department of Raymond James & Associates, Inc., and are subject to change. Past performance is not an indication of future results and there is no assurance that any of the forecasts mentioned will occur. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. An investment cannot be made in these indexes. Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The MSCI ACWI (All Country World Index) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consisted of 48 country indices comprising 23 developed and 25 emerging market country indices. The developed market country indices included are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States. The emerging market country indices included are: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.
International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. Small and mid-cap securities generally involve greater risks. Companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. The performance noted does not include fees or charges, which would reduce an investor's returns. Asset allocation and diversification do not guarantee a profit nor protect against a loss. Debt securities are subject to credit risk. A downgrade in an issuer’s credit rating or other adverse news about an issuer can reduce the market value of that issuer’s securities. When interest rates rise, the market value of these bonds will decline, and vice versa. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, state or local taxes. Material prepared by Rademacher Financial, Inc and by Raymond James for use by its advisors.
Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. © 2018 Raymond James Financial Services, Inc., member FINRA/SIPC. Investment Advisory Services offered through Rademacher financial, Inc. Rademacher Financial is not a registered broker dealer. Rademacher Financial Inc. is an independent firm.
To opt out of receiving future emails from us, please reply to this email with the word “Unsubscribe” in the subject line. The information contained within this commercial email has been obtained from sources considered reliable, but we do not guarantee the foregoing material is accurate or complete.
The S&P MidCap 400® provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500®, measures the performance of mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment. S&P 500 Value is a market-capitalization-weighted index developed by Standard and Poor’s consisting of those stocks within the S&P 500 Index that exhibit strong value characteristics. The S&P SmallCap 600® measures the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable. S&P 500 Growth measures growth stocks using three factors: sales growth, the ratio of earnings change to price, and momentum. Constituents are drawn from the S&P 500®.